Aarvee Denims & Exports

IDBI Capital, in its results review on Aarvee Denims & Exports, recommends a "buy". It states that there has been growth accompanied by margin expansion and surge in domestic revenues.

The Q3 FY06 revenues at Rs 72.6 crore, were up 21 per cent y-o-y and profits at Rs 9.8 crore, up 64 per cent. The domestic revenue composition has seen a sharp increase from 86 per cent in Q3 FY05, to 95 per cent in Q3 FY06.

The realisations for the quarter have been at around Rs 89 per meter (a fall of one rupee against Q2 FY06). The high growth in the domestic denim market is leading to expansion by existing players and prompting newer players to enter the segment.

Many export-oriented players have also started diverting their produce to the domestic market. The demand scenario remains robust, with demand for value-added denims and specifically polyester-mixed denims increasing.